MRH: I’m assuming part of TT’s pricing model is to support the rights you have to negotiate to build up a small cache so that you can continue to develop titles so that the label has an ongoing title roster?

NR: Well, the limited edition model of 3,000 units per title was exactly the same with what we started at Fox in 1995 with CDs. It appeals to the studios because for them it’s a model that eradicates paperwork. In other words, we say to them ‘We’re going to do 3,000 only for “X” title,’ and they say ‘Fine, how much are you going to pay,’ and we work out a per unit rate which they then get in advance.

With that hit it’s one payment and they’re out of it; and then we have the 3,000 units that we hope that we’re able to sell. If we’re going to release, let’s say, 2 titles per month, which is what our current plan is, we have to make sure that we get to our break-even point, which is basically 1,500 minimum on each title in order to pay forward the royalty obligations for the next month’s titles.

It’s a much cleaner model than say licensing 50 films from them and saying ‘We’ll pay you a $50,000 or $100,000 advance against royalties,’ because then they’re dealing with royalty statements every quarter, and of course if you’re distributing through the usual ‘bricks & mortar’ outlet you have to deal with things like returns, and that’s when it becomes incredibly messy, paperwork-driven, and utterly confusing. It’s a tangle the studios don’t really want to be involved with because it creates a job on top of a job

We knew that this limited edition model was the cleanest and the easiest; the one that wouldn’t sink us into debt; and make it easiest for everybody all around. It’s hard on us only because we have to front the money for the royalties, and then if we don’t sell well enough on a particular title, then that becomes a losing proposition, but that’s a chance we thought was worth taking.

MRH: Do you find that your background in soundtracks also helped a great deal in terms of which business models work, where the flaws are, and so on?

NR: Yes, I think it did in this particular case, because working in conjunction with Screen Archives Entertainment (SAE), who I’ve worked off and on since the late eighties, we know that we had sort of one big soundtrack mail order company that could effectively consume most of the niche labels’ products.

Basically, without SAE, labels like Kritzerland, La-La Land, FSM, and any of those who already sell through their own websites would be in a bit of a pickle. SAE has become in a sense (and I mean this facetiously) the AIG of soundtracks. It is the operation, if you like, or the octopus that controls all of those niche labels’ output and finds a home for them.

Their worldwide mailing list is basically the soundtrack market, so when we began working with SAE years ago on various soundtrack-related projects, we realized that what they did - by effectively going online, by effectively eliminating bricks & mortar retail – was, in a sense, eradicate one of the biggest problems: distribution.

They ended the problem of going to a third-party distributor who then sold your products to all kinds of stores and accounts all over the country, and then dealing with the problem of half of that product coming back 6 months later because every store in America has the right to return anything they can’t sell. That creates enormous accounting, and it makes the labels unsure of what they’re doing. You can’t be sure how many you’ve sold; you can only be sure of how many you’ve shipped, but you never know how many are coming back.

SAE is a no-return business because they will take a certain amount of a limited edition quantity of every single label in the soundtrack business. They sell them over a period of time, but those are sales - they are not shipped numbers - so therefore it gives everyone an accurate idea of what’s selling. In other words, you get a very clear and quick idea of whether a title is going to move its limited edition quantity, or whether it’s going to stall and sit there for sometimes years.

When we began TT and we instituted this limited edition / DVD-Blu-ray model, I went to SAE because we knew they were the best in the business at this particular thing. They are after all the sort of grandfather of it. We said to them ‘We will sell you the TT DVDs on exactly the same basis; in other words you won’t get stuck because you only pay us for the ones you actually sell.’ There are only 3,000, so therefore 3,000 are warehoused, and SAE works their way through them on a sale-by-sale basis. That way no one is compromised with things that we think are sold but in reality aren’t sold. It makes sense.

MRH: With Mysterious Island, was there any kind of restoration you had to do yourself or had Sony already done the work?

NR: Sony does everything, and they’re particularly ahead of the game because they’re doing 2K and 4K scans and protection masters of as many of their films as they can, regardless of whether or not their own studio or anyone else is going to release those things on Blu-ray. They already have a substantial list of catalogue titles that are what we call ‘Blu-ray ready.’

When I call Sony and I say ‘We’d like to license a batch of titles,’ I first talk to Grover Crisp (Senior Vice-President in charge of Asset Management at Sony) who tells me what’s in the hopper - what’s been done, what is currently being worked on, what they’re likely to tackle next - and they start with what the studio wants to do themselves versus what the studio would like to license out to other labels. We then sort of cherry pick our titles based on that information.

We don’t touch the masters at all. We’re not restoration experts. They are shipped by Sony or Fox to our authoring and compression facility, [and when all of the capturing is done], the masters are returned to the studio. We are only issuing titles that are, in a sense, ‘ready to go.’

MRH: Were you involved in the isolated score track on the Mysterious Island Blu-ray?

NR:  I was to the extent that I hired Mike Matessino to do it for me. We had to go from every source that existed, which included the old CD on Cloud Nine Records. That disc had been derived from Columbia’s own LCR, which is a left-centre-right track stereo mix and has some separation, but is not terrifically wide. It is almost as Mike Matessino likes to call it a sort of a ‘fat mono,’ but that CD release was incomplete.

Sony’s restored stems also had big holes in them, and there were huge numbers of drop-outs and things like that. There’s also the M&E (music and effects) track, but unfortunately in particularly busy scenes, such as ‘buzzing bees’ or ‘crashing surf,’ there isn’t any way to get those effects out, so using every source at his disposal, Mike cobbled together the isolated score so that every cue is there, but some of them still have the effects.

We had a screening of the film at the Egyptian theatre in Hollywood, and one in the audience asked afterwards why had I called it an isolated score track in this case if it was really a music & effects track, and I said ‘Well, it’s not really a music & effects track, it’s both: it’s a hybrid.’

When we did Fate is the Hunter, we identified the isolated score track as an isolated music & effects track because that was the truth: it was mostly culled from the music & effects track. In the case of Mysterious Island it is mostly culled from the music tracks, probably in percentage terms about 70% from the music and about 30% from the M&E tracks, so therefore it didn’t seem right to call it an M&E track; that would be misleading.